Bourse continues to mire in covid-19 mud

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The Bourse continued to underperform, akin to its performance during the Covid-19 period of uncertainty two years ago, falling for the third consecutive market day to yesterday, made worse by expectations that yesterday’s Monetary Board meeting will have had resulted in higher policy rates to counter record high inflation of a near 100 per cent. A high interest rate regime is inimical to the growth of the bourse.

Consequently, the ASPI, yesterday over the previous day Tuesday fell by 1.67 per cent (121.24 points) to 7,117.35 points and the S&P SL 20 Index by 2.01 per cent (46.84 points) to 2,247.04 points on a Rs 982.28 million turnover over a 51.47 million share volume.

The ASPI and the S&P SL 20 indices recorded figures lower than this were during the height of the Covid-19 Pandemic where the ASPI returned a figure of 6,774.22 points on 31 December 2020 and the S&P SL 20 Index 2,205.97 points on 13 March 2020, respectively.

Subsequently shareholder wealth wiped out in the three market days to yesterday amounted to Rs 155.44 billion while the ASPI and the S&P SL 20 indices in the review period have fallen by 340.13 points (4.56 per cent) and 133.22 points (5.60 per cent), respectively.

The last time, prior to yesterday that the bourse has fallen for at least three consecutive market days was 19 days ago, where for four consecutive market days from 13 June to 17 June the bourse, on a daily basis, declined.

However, the Bourse enjoyed a pyrrhic net foreign inflow for the third consecutive market day to yesterday, withyesterday’s figure being Rs 27.99 million, though in the calendar year to date it has suffered a net foreign outflow of Rs 1.26 billion. 

‘Spot’ Unchanged 4th Day

The benchmark, albeit administered market ‘spot’ closed yesterday to be trading unchanged for the fourth consecutive market day at Rs 360/364 to the US dollar in two way quotes, market sources told Finance Today.

Year on year (YoY) to yesterday the administered market ‘spot’ was down by between 78.22-79.31 per cent (Rs 158-161), thereby causing cost push inflationary pressure as Sri Lanka is an import dependent economy, sources said.

In like developments, the administered ‘spot’ for official purposes, such as for trades involving  Central Bank of Sri Lanka (CBSL), Government of Sri Lanka (GoSL) and/or CBSL, GoSL and the market, YoY to  yesterday has depreciated by 80 per cent (Rs 159.92).

By Paneetha Ameresekere